91É«ÇéƬ

With an increase of mergers and acquisitions in the alcohol industry, the ATO (and specifically the Alcohol Stakeholder Group) are reminding businesses of the implications such activities may have on the eligibility of entities to apply the Excise remission scheme for manufacturers of alcoholic beverages (Remission Scheme).

The following two Remission Scheme eligibility criteria should be considered closely when undertaking mergers and acquisitions:

• Meaning of ‘alcohol manufacturer’
• • An entity will not be considered to have manufactured an alcoholic beverage where it acquires alcoholic beverages from another manufacturer or acquires the business of another manufacturer, including the trading stock on hand.
  • To qualify as an ‘alcohol manufacturer’ in these situations, the entity would need to undertake further manufacture in respect of the product. The remaining eligibility criteria would also need to be considered to ensure eligibility to the Remission Scheme (i.e. the 70% fermentation/distillation requirement).
• Legal and economic independence
• • Where two or more alcohol manufacturers are not ‘legally and economically independent’ only one alcohol manufacturer in that group is entitled to a remission of excise duty for the financial year.
  • Once an entity has applied the remission under the Remission Scheme, any other entity that is not legally and economically independent of the first will not be entitled to apply the remission.
  • Legal independence and economic independence must be considered individually, as well as collectively and requires a balanced analysis of relevant factors.

The full eligibility criteria and supporting guidance can be found in , with additional information on legal and economic independence included in .